Snyder's-Lance reported net income in the first quarter of 2014 was down over the first quarter of 2013, but the company this week said it had acquired a Wisconsin snack maker and that it has plans to sell its Private Brands to an Ohio snack maker.
Snyder’s-Lance Inc., which has manufacturing facilities in Hanover, York County, said Wednesday it is acquiring Baptista’s Bakery Inc., of Franklin, Wis., with whom it already has a relationship. Baptista’s makes baked snack foods and “better for you” snacks consistent with emerging consumer trends, according to a Snyder's-Lance news release.
“They are the manufacturer of our fast growing Snack Factory Pretzel Crisps brand and have unique capabilities consistent with the innovation plans of Snyder’s-Lance,” the company said in the release. “This transaction supports efforts by Snyder’s-Lance to sharpen its focus on our branded products in growth categories such as ‘better for you’ and other emerging products which are driven by consumer preferences and insights.”
William Blair & Co. LLC acted as financial adviser, and Foley & Lardner LP was legal counsel to Baptista’s in the transaction. K&L Gates LLP acted as legal counsel to Snyder’s-Lance. Completion of the transaction is subject to regulatory approvals as well as customary closing conditions and is expected to close in the second quarter.
Also Wednesday, Snyder’s-Lance announced it had plans to sell its Private Brands line to Shearer’s Foods LLC, based in Massillon, Ohio. The sale includes two manufacturing facilities in the United States and Canada. Which facilities it's selling is not clear; attempts to contact Snyder’s-Lance this morning were unsuccessful.
By selling the Private Brands line, Snyder’s-Lance president and CEO Carl E. Lee Jr. said in a news release, the company would rededicate itself to its branded lines.
“Over the past several years, we have been building operational and branded capabilities which provide an exceptional platform for accelerating growth,” he said. “Private Brands has performed well over that time and is now in a position where a new, private-brands centric owner can build on this momentum and take it to new levels. Looking forward for Snyder’s-Lance, we believe focusing more completely on our branded products will create better long-term shareholder value as we grow organically through product innovation and the acquisition of additional core brands.”
Completion of the transaction is subject to regulatory approvals and Shearer’s obtaining financing for the transaction, as well as customary closing conditions, and is expected to close in the second quarter, the company said.
BofA Merrill Lynch acted as transaction adviser to Snyder’s-Lance, and K&L Gates LLP acted as legal counsel.
In terms of earnings, Snyder's-Lance reported net income for the quarter ended March 29, excluding special items, of $18.2 million, or 26 cents per diluted share, according to a company news release.
That compares to net income of $19.8 million for the first quarter of 2013, or 28 cents per diluted share. Net income including special items was $16.8 million for the first quarter of 2014, or 24 cents per diluted share, according to the release.
Special items for the first quarter of 2014 included after-tax charges of $1.4 million consisting primarily of an impairment charge and certain acquisition related costs. There were no special items in the first quarter of 2013.
Net revenue for the first quarter was $437 million, an increase of 4.4 percent compared to prior year net revenue of $419 million. The company also declared a quarterly cash dividend of 16 cents per share on common stock. The dividend is payable on May 30 to stockholders of record at the close of business on May 22.